S Corp Basis Schedule

[srpete76]

Bring back the S Corp basis schedule as a worksheet, in addition to the Form 7203.

[ibs-cpa]

Since tracking shareholder basis is the responsibility of the shareholder and not the entity the shareholder basis schedule is a better tool for the entity to provide what it knows to the shareholder.  Last year I was able to add a disclaimer note on the shareholder basis schedule that the calculation might not include transactions that occurred outside the entity such as direct purchases form another shareholder or step up from inheritance.  This allowed me to be able to offer the information I had to help them complete their 7203.  Now I can only give a copy of the Form 7203 with their K-1 and there is no way for me to indicate that my numbers may not be 100% correct.  Please either bring back the basis schedule as an option or add a way for the 7203 to be notated as informational only.

[Accountannie]

I have seen this option in the 1040 module under screen 3 miscellaneous info and then expand on the Miscellaneous section. It is 4 boxes above the DIGITAL ASSET FAQ button. However, it does not always work for me. I didn't see it in the S-Corp module, though, as you are requesting. Seems like it would be if it is already in the 1040 module. If it is available already, I don't know where it is.

[pamdory]

Also in the 1040 module in Settings>Options>Tax Return>Federal Tax Options  you'll find  Basis Schedule just under NOL Carryforward Deduction Statement.  

I also don't find a similar option within the 1120-S module.

[Strongsilence-CPA]

ibs

Thanks for raising awareness of this issue.  I have small S-Corp clients (nearly all are 1 person) and I don't see these outside transactions at all. So, these questions have a tinge of ignorance.

Since the outside transactions are not known, then how will the older SH basis worksheets be more complete than the 7203?

I assume that the disclaimer is in situations when you are not preparing the 1040 for the shareholder. The disclaimer is wise.  When you are preparing the 1040 for the shareholder, you will be able to do a complete basis calculation right?

"outside the entity such as direct purchases form another shareholder". Won't this situation become known to you during tax preparation, through asking the client, or getting a shareholder stock schedule?

The word "replace" in the IRS instructions suggest that LC will not be bringing back the old worksheets.  Form 7203 and its separate instructions are developed to replace the 3-part Worksheet for Figuring a Shareholder’s Stock and Debt Basis and it...

[ibs-cpa]

The basis schedule will not be more complete, but it is not as official looking as the Form 7203 and it has the option of including the "disclaimer" statement.  For now what we have done is add wording to the K-1 letter.

And, yes, this is primarily aimed at shareholders whose 1040's we do not prepare, but it can also be for ones we do prepare if we have not been handling their tax work from inception of the entity.